Shum v. Intel Corporation et al

Filing 1014

ORDER RE: TAXATION OF COSTS by Judge D. Lowell Jensen granting in part and denying in part 1004 Plaintiff's Motion Challenging the Clerk's Taxation of Costs. (fs, COURT STAFF) (Filed on 10/23/2009)

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ) ) Plaintiff, ) ) v. ) ) INTEL CORPORATION, JEAN-MARC, ) VERDIELL, and LIGHTLOGIC, INC ) DefendantS. ) ______________________________) FRANK T. SHUM, No. C02-3262-DLJ ORDER RE: TAXATION OF COSTS On September 25, 2009, the Court heard arguments on Plaintiff's Motion Challenging Clerk's Taxation of the Parties' Bills of Costs. Paul Kirsch appeared on behalf of the Having plaintiff; Steve Taylor appeared for the defendants. considered the arguments of counsel, the papers submitted as well as any supplements thereto, the applicable law, and the record in this case, the Court grants the motion in part as outlined below. Procedural background Plaintiff Frank Shum (Shum) and defendant Jean-Marc Verdiell (Verdiell) are optoelectric engineers who worked in the field of fiberoptic telecommunications. formed a corporation called Radiance Design. In April 1997 they Pursuant to a Plan of Liquidation, that company ceased to exist in January 1998. Thereafter Verdiell filed and obtained seven different patents, related to optoelectronic technology, which were owned by a company he had formed called LightLogic. 1 In June 2001 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Verdiell sold LightLogic and its patents to Intel Corporation. In May 2002 Shum filed this lawsuit in which Shum claimed that he was defrauded by Verdiell and the other defendants; that there was a breach of contract committed; and that the defendants have been unjustly enriched under California law. Several months later Shum amended his complaint to add a federal claim contending that he was the sole inventor, or at least a joint inventor, on each of the seven patents, and that the patents should be amended to show his inventorship. The Court decided that the federal inventorship claims and state law claims should be bifurcated, and a bench trial as to the inventorship claims only was held in January 2005. At the conclusion of the trial this Court found that Shum had failed to meet his burden of proof on the inventorship claims and entered judgment in defendants' favor. In 2006, the Court granted summary judgment on Shum's remaining state law claims. See Docket Item Nos. 453, 663. On Shum's appeal, the Federal Circuit found that the issue of inventorship was integral to the factual basis of the state law claims such that it had to be decided by a jury pursuant to the seventh amendment. The Federal Circuit reversed and remanded the inventorship and state law claims to this Court. The case was set for re-trial. In November and December 2008 the case was retried before a jury. In the second trial Shum presented two sets of claims, one as to the fraud and fraud related claims under state law, and the other as to his inventorship status as the sole 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 inventor or as the co-inventor of each patent under federal law. On the state law claims he sought verdicts for liability and for damages in the approximate amount of 400 million dollars. On the inventorship claims he sought verdicts establishing him as either the sole inventor or co-inventor of the seven patents. Just before the second trial began, Shum withdrew all claims of inventorship as to the "dual enclosure" patent (U.S. Patent No. 6,252,726). In the course of trial Shum changed his claims with respect to the remaining patents to one of co-inventorship only. The consequence of this decision is that Shum has implicitly conceded that defendant Jean-Marc Verdiell was at least a co-inventor of each of the six remaining patents-in-suit. See, e.g., 2008 Trial Tr. 732:6-20 (Shum); 734:24-735:5 (Shum); 736:19-737:1 (Shum). The jury returned verdicts finding that plaintiff had established his co-inventor status with respect to one or more patent claims in five of the six patents still at issue. A mistrial was declared as to all other claims as the jury was unable to reach a decision on Shum's remaining claims for inventorship, and as to any of the state law claims for intentional misrepresentation, breach of contract, and unjust enrichment. Subsequently, after post-trial motions, the Court granted judgment for Shum as a co-inventor on five of the patents, and for defendant on the remaining claims, holding that Shum had failed to introduce sufficient evidence to permit a finding of co-inventorship on the sixth patent, or for 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 liability or damages on any of the state law claims. See Docket Item Nos. 978, 979 & 980. On May 13, 2009, both defendants and Shum submitted bills of costs to the Clerk of the Court. On June 29, 2009, the Clerk taxed costs in defendants' favor in the amount of $507,644.82, and in Shum's favor in the amount of $195,523.27. Defendants have not objected to the costs which the clerk assessed against them. When the costs are offset against each other, Shum would be responsible to defendants for $312,121.55. Shum filed the instant motion challenging the Clerk's taxation of the parties' costs both on the overall issue of who was the prevailing party and also on the appropriateness of particular costs. Discussion. I. Who is the Prevailing Party? Shum and defendants each assert that they are the prevailing party and that they therefore are entitled to an award of costs. Shum uses this argument to ask the Court to award costs only to Shum. While defendants argue in rebuttal that they have prevailed, they did not separately file a motion seeking to deny Shum the costs awarded to him. Federal Rule of Civil Procedure 54(d) provides that "[u]nless a federal statute, these rules, or a court order provides otherwise, costs--other than attorney's fees--should be allowed to the prevailing party." Fed. R. Civ. P. 54(d)(1). In a patent case, Federal Circuit law governs the determination of which party has prevailed. Manildra Milling Corp. v. Ogilvie 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Mills, Inc., 76 F.3d 1178, 1182 (Fed. Cir. 1996). See also Inland Steel Co. v. LTV Steel Co., 364 F.3d 1318, 1320 (Fed. Cir. 2004) (stating that the Federal Circuit has "made it clear" that its own law, rather than that of the regional circuits, defines the meaning of prevailing party in patent litigation). Shum relies on the Manildra case to support his argument that, although he won no monetary damages in his lawsuit, he was still the prevailing party. The plaintiff in Manildra filed suit seeking a declaration that the defendant's patents were invalid and, additionally, sought monetary damages for the defendant's alleged violation of the Lanham Act, Kansas common law, and federal antitrust laws. Id. at 1180. The Manildra plaintiff obtained a judgment that defendant's patent was invalid. On appeal the court upheld the invalidity decision but reversed the remaining causes of action, which had been the source of a monetary judgment. Nonetheless, the Federal Circuit concluded that the The basis for the court's plaintiff was the prevailing party. determination was that a "plaintiff `prevails' when actual relief on the merits of his claim materially alters the legal relationship between the parties by modifying the defendants' behavior in a way that directly benefits the plaintiff." Id. (quoting Farrar v. Hobby, 506 U.S. 103, 113 S. Ct. 566, 573 (1992)). The Manildra court went on to find that winning a declaration of invalidity permitted the plaintiff to use its 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 production process free from risk of an infringement suit and without the necessity of obtaining a license. As a result, although Manildra's suit ultimately produced no money judgment, it . . . stripped [defendant] of a competitive edge vis-à-vis Manildra." Since "a patentee receives the right to exclude all others from making, using and selling the patented invention, . . . a judicial declaration that one is free from another's right to exclude alters the legal relationship between the parties. Id. See also Kemin Foods, L.C. v. Catholic University of America, 464 F.3d 1339, 1347 (Fed. Cir. 2006). Shum asserts that when the reasoning of Manildra is applied to his situation, he is the prevailing party. Shum did obtain a judgment that he is a co-inventor of five patents. However, the Court looks at the case as a whole to determine the effect of that jury finding. In the first action, Shum asserted that he was the sole inventor or a co-inventor of the patents. He did not prevail on either claim. The Federal Circuit sent the case back to this Court on procedural grounds holding that the matter of fraud had to go the jury. In the second action Shum again asserted During that he was either the sole inventor or a co-inventor. cross-examination by defendant during the trial, plaintiff abandoned his claim of sole-inventorship. prevail on that part of his claim. Therefore he did not He did prevail in part on the remaining aspect of the inventorship claim, namely that he was a co-inventor of the patents. He now looks to this, at best, partial victory to allege that he is the prevailing party, ignoring that defendant clearly prevailed on the sole 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 inventorship aspect of this claim. Nonetheless, giving plaintiff the benefit of the doubt, the Court will analyze the effect of his partial victory to determine if it fits the "prevailing party" analysis set out in Manildra Mining. The Court begins by noting that the jury's finding of coinventorship status for Shum did not materially alter the legal relationship of plaintiff Shum and defendant Verdiell in any way. First, unlike in Manildra, Shum did not win a judgment which excluded Verdiell from the market ­ Shum was only found to be a co-inventor of the patents, not the sole inventor. This finding then did not give Shum a competitive edge over Verdiell in the marketplace. Moreover, under the Plan of Liquidation, Shum had always had the rights to exploit the technology underlying the patents without having to financially account to Verdiell. So Shum's co-inventorship status, while perhaps conferring some additional benefits to Shum, does not at all change Shum's market posture vis-a-vis Verdiell. In Manildra terms, Shum's favorable verdict did not materially alter the legal relationship between Shum and Verdiell. Moreover, even if it can be argued that there was some change in the relationship, any such change clearly did not cause the benefit Shum obtained at trial of a declaration of the PTO that he was a co-inventor. Shum argues in the alternative that he prevailed on the "central issue" of the case. To bolster this claim he points to the language in the Federal Circuit's decision that "the factual issue of inventorship is a central issue in the 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 determination of fraud," and that "Shum's inventorship claim is `inextricably intertwined' with" his state law claims. Shum v. Intel, 499 F.3d 1272, 1278 (Fed. Cir. 2007) (citing District Court's bifurcation order). This Court does not find the language of the Federal Court order to be dispositive of who prevailed in the action, as the Federal Circuit's opinion regarded the proper procedure for resolving the claims, and was not an opinion on the merits of the action. As a matter of fact, Shum lost his fraud claim, and his favorable inventorship verdict can stand only because it is wholly independent of the fraud claim. The Court does not believe that the law holds that there can only be one "prevailing" party per case. See, e.g. K-S-H Plastics, Inc. V. Carolite, Inc., 408 F.2d 54, 60 (9th Cir.) cert. denied, 90 S.Ct. 69 (1969)(court did not abuse its discretion in awarding partial costs to prevailing party who was only partially successful); Bell v. Board of County Com'rs of Jefferson County, 2007 WL 1411613 (D.Kan.,2007)([I]n cases in which the prevailing party has been only partially successful, some courts have chosen to apportion costs among the parties or to reduce the size of the prevailing party's award to reflect the partial success). If the Court were required to choose only one "prevailing party", the Court does not believe that the decision would be a close one ­Verdiell would be the "prevailing" party. Rather than being ordered to pay $400 million to Shum, Verdiell owes nothing to Shum. Rather than losing seven patents, Verdiell 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 retains his inventorship rights and his ability to commercially exploit the technology. Shum gains the legal title of being a co-inventor of certain patents but no right to commercially exploit the technology that he did not already have. Nevertheless, the Court will find that each party prevailed on some aspects of the action, a finding which is consistent with the costs methodology adopted by the Clerk's office in taxing costs and one which has already been implicitly accepted by Defendant. The Court therefore turns to the issue of the specific costs contested by Shum. II. Should Specific Costs Be Reduced or Disallowed? Shum argues that the Court can reduce Shum's award or require the party's to pay their own costs. A district court may reduce costs which are unreasonably large or which are not supported by adequate documentation. See White & White v. American Hosp. Supply Corp. 786 F.2d 728, 730 (6th Cir. 1986); In re Butcher, 200 B.R. 675, 681 (C.D. CA 1996); N.D. Cal. Local Rule 54-1. The Court also has discretion to award partial costs or to require the parties to pay their own costs. See, K-S-H Plastics, Inc. V. Carolite, Inc., 408 F.2d 54, 60 (9th Cir.) cert. denied, 90 S.Ct. 69 (1969); Johnson v. Nordstrom-Larpenteur Agcy, Inc., 623 F.2d 1279, 1282 (8th Cir. 1980). A. Costs Awarded at the First Trial Following the inventorship bench trial the Court awarded Defendants $154,400 in costs, then stayed execution on that costs award while the appeal was pending. (See Defendants' Bill 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of Costs Exhibit D, p. 1.) As already described, the Federal Circuit reversed the judgments of this Court as to the inventorship trial and remanded the matter for further proceedings. Shum v. Intel, 499 F.3d 1272, 1278 (Fed. Cir. 2007). Shum argues that the Federal Circuit's reversal of the earlier judgment in this case vacates the award of costs to Defendants. Shum looks to Furman v. Cirrito, 782 F.2d 353, 355 (2d Cir. 1986) for support. The Furman case holds that reversal or substantial modification on appeal vacates an award of costs to the prevailing party at the district court level. In Furman, the district court dismissed plaintiff's civil RICO action and awarded costs to defendants. The Court of Appeal affirmed, and ordered costs be awarded to defendants-appellees. The Supreme Court reversed (Joel v. Cirrito, 473 U.S. 922 (1985)) and vacated the appellate decision. On remand, the appellate court stated that when a district court judgment is reversed or substantially modified on appeal, any costs awarded to the previously prevailing party are automatically vacated. Id., citing 10 Wright, Miller & Kane, Federal Practice and Procedure, § 2668 at 213-14 Shum argues that this language means defendants are not entitled to any costs from the first trial. However, the Furman court goes on to state that "[i]t is often sound policy, of course, to wait until a controversy is finally decided on the merits before awarding costs, and to then determine who is the `prevailing party', instead of judging that issue piecemeal at each stage of the litigation." Id. 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendants argue that they are entitled to these costs since they were awarded to defendants for defeating Shum's claims for sole inventorship at the bench trial and prevailing on his remaining claims on a motion for summary judgment. Defendants assert that this is the same result they obtained in the 2009 jury trial, and therefore the 2006 award of costs was attributable to an earlier phase of the successful defense of claims on which defendants wholly prevailed, so that it was properly taxed. See 10 Charles A. Wright, et al., Federal Practice and Procedure § 2667 ("Further, the prevailing party at a second trial is usually awarded the costs of both trials"). But this ignores the fact that co-inventorship was also an issue at the bench trial and that this issue was decided in Shum's favor at the jury trial. After the bench trial the verdict against Shum was reversed on appeal. The effect of the Federal Circuit decision was to return the parties to the beginning of the case. As a result of the second trial, the plaintiff prevailed substantively on one of the inventorship issues presented to the jury ­ the coinventorship claim. The defendant prevailed on the other inventorship issue presented to the jury --the sole inventorship claim. In the Court's view the defendant is entitled to costs of the bench trial attributable to the sole inventorship issue, but he is not entitled to costs attributable to the coinventorship issue. The record currently before the Court is insufficient for the Court to make a precise allocation of the 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 exact amounts expended at the first trial attributable to defending sole versus co-inventorship, were such a division even possible. The Court exercises its discretion to award to defendants half of the fees they seek to be reimbursed for from the first trial, as they prevailed on only one of the two inventorship claims in the second trial. B. Costs on Appeal Defendants have now withdrawn their claim under Rule 54(d) to recover $1,239.40 in transcript, printing and binding costs incurred in opposing Shum's appeal in 2006. C. Claims for "Other Costs" For Demonstratives Regarding the Inventorship Claims Defendants obtained reimbursement for over $130,000 in costs from four different companies (Focal Point, Verdict Media, Gemmiti Model Art and FTI Consulting) for "demonstrative exhibits," "graphics" and "models" used at trial. Shum argues that Defendants have failed to meet their burden of showing why each of their presentation and exemplification costs were necessary, reasonable, and proper recoverable costs under the circumstances of this case. this regard. Shum makes several arguments in First, he asserts that Defendants' invoices do not provide sufficient detail to determine that all of these "exhibits, graphics and models" were actually used at trial rather than in preparation for trial. Shum also claims that there is insufficient documentation for him to determine whether the work was duplicative. Shum then argues that 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 defendants' claimed costs are too high as they would still have had their demonstratives and graphics from the initial inventorship bench trial. (See e.g., invoice dated 9/9/2008 on Defendants' Bill of Costs Exhibit D). Finally, Shum claims that defendants may not be reimbursed for these costs because they did not prevail on the inventorship claims which are the subject of all or virtually all of these exhibits, graphics and models. To the extent that Shum argues that the demonstratives were related to issues on which Shum ultimately prevailed, the Court finds that defendants could not have anticipated that Shum would change his position on inventorship issues right before and during trial; and that understanding the history and creation of the patents was integrally related to the claims on which defendant did prevail. Local Rule 54-3(d) provides that reimbursement for "[t]he costs of preparing charts, diagrams, videotapes and other visual aids to be used as exhibits is allowable if such exhibits are reasonably necessary to assist the jury or the Court in understanding the issues at the trial." Local Rule 543(d)(emphasis added). Shum's further objection that there should be no recovery for demonstratives that are not proven to have been used at trial is incorrect as a matter of law. The Local Rule allows recovery for materials "to be used" at trial. It does not require actual use of each item so prepared. See also HaagenDazs Co. v. Double Rainbow Gourmet Ice Creams, Inc., 920 F.2d 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 587, 588 (9th Cir. 1990) (costs of exemplification made in anticipation of trial, but not used at trial, are recoverable). The Court concurs with defendants that the case presented complex technical issues and that the jury benefitted at trial from the use of demonstrative evidence. The Court rejects defendants' argument that Shum should be required to pay for the time defense counsel spent in "close collaboration" with their consultants, especially as it related to strategic planning for the trial as opposed to costs for production of the demonstratives. Review of the invoices submitted indicate that there are charges for work well beyond the preparation of the demonstratives themselves. The Court finds that the invoices from Verdict Media are replete with references to trial preparation including meeting with attorneys to go over openings and closings statements; to preparation for a mock trial; and to organizing documents. Verdict Media Invoices dated 9/15/08; 12/9/08 and 1/10/09. See The Court has reviewed each of the submitted invoices and will not tax costs for work done beyond what appears to be related to the creation or presentation of demonstrative exhibits. The Court will disallow in its entirety the Verdict Media invoice of 9/15/2008 in the amount of $3,350. As to the invoice of 12/09/08, the Court acknowledges that the demonstratives could not have been presented without the appropriate technical resources. The in-court technician time and the equipment costs associated therewith are therefore permitted. This amount totals $10,605. 14 (Thus the total bill 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 is to be reduced by $19,571.96). Similarly, the Verdict Media invoice of 1/10/09 is reduced to cover only in-court technical personnel and equipment for a total of $13,359.50. is reduced by $14,265). The Focal Point invoices also contain charges for services referred to as "strategy" and "case management". disallows these amounts. The Court (This bill The 9/30/08 invoice of Focal Point therefore is reduced to $9,250 (thus the total bill is reduced by $11,367.69). The Focal Point bill of 10/31/08 is reduced to $7,810.50 (this bill is reduced by $13,062.73). The FTI invoice of November 10, 2008 is more difficult to parse. Much of the work involved appears to be in preparation The for a mock trial, which cost would not be taxed. Declaration from counsel Stephen Taylor states that while "some of the 2008 demonstrative exhibits were prepared in advance and used at a mock trial, those same demonstratives were expressly prepared with the jury in mind and were later used or modified for use with the jury." ¶ 6. This declaration does not give the Court much guidance as to what percentage of the exhibits constitute "some." Given Taylor Declaration filed 8/21/09 at the overall cost and variety of exhibits created, and that the burden is on defendants to demonstrate that the taxation of costs is appropriate, the Court will allow only half of the total cost and only permit $20,490 of the requested $40,979.90. D. Copying Charges 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Shum argues that the $77,322.40 taxed in costs for photocopying covered copies beyond what was necessary for discovery and for trial presentation. Specifically, § 1920(4) provides that a judge or clerk may tax fees paid for the "exemplification and copies of papers necessarily obtained for the use in the case." The party seeking to recover these costs must show that the copies were necessary and provided either to the court or the opposing party. Grady v. Bunzl Packaging Supply Co., 161 F.R.D. 477, 479 (N.D. Ga. 1995). Shum further argues that Defendants have not offered an apportionment of which copies were made in support of the state law claims and which in support of the inventorship claims, on which they did not prevail. Shum therefore contends that at least half of these costs, or $33,392.43, should not have been taxed as costs. Defendants counter that their copying costs are reasonable and taxable and that they are entitled to recover costs for reasonably necessary duplication of documents, regardless of whether the copied documents were all offered into evidence. 28 U.S.C. § 1920(4); L.R. 54-3(d)(2); Haagen-Dazs Co., 920 F.2d at 588. Counsel for defendants claims that oversized and color copies were necessary to demonstrate the technology and that in part the large number of copies were needed to be exchanged with counsel as part of the discovery process. Taylor Decl., ¶¶ 8-10. The Court finds that although the copying charge seems high, given the number of documents in the case, the Court will reduce the amount by 20% in light of the co-inventorship 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 verdicts and allow the remainder to stand. allowance to defendants of $61,857.92. The result is an E. Witness Fees According to Shum, the clerk erroneously taxed all of the witness fees submitted by Defendants in the amount of $12,301.63 when the clerk should have only taxed $1,730.14 ($12,301.63 - $10,571.49). The prevailing party is entitled to recover fees and disbursements for witnesses. See 28 U.S.C. § 1920(3); see also L.R. 54-3(e). Local Rule 54-3(e) provides that per diem, subsistence and mileage payments for witnesses are allowable to the extent reasonably necessary and provided for by 28 U.S.C. § 1821. No other witness expenses, including fees for expert witnesses, are allowable. Shum makes several different arguments about certain of the witness fees. First, Shum wants to strike witness fees totaling $585.52 apportioned to witnesses the Defendants subpoenaed but did not call at trial. However, the physical presence of a witness at trial is not necessary to recover a subpoenaed witness's costs "when it was reasonably expected that [the witness'] attendance would be necessary and he had held himself in readiness to attend." Spanish Action Committee v. Chicago, 811 F.2d 1129, 1138 (7th Cir. 1986); see also Hurtado v. United States, 410 U.S. 578, 584-87 (1973) (finding that 28 U.S.C. § 1821 compensates for availability to testify). Defendants contend, and the Court concurs, that the testimony 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of each of the three witnesses was reasonably expected to be necessary given the scope of the issues Shum potentially could have raised in his case-in-chief. Taylor Decl., ¶ 11. Therefore the Court finds that the $585.52 cost is appropriate. Shum next seeks to disallow witness fees totaling $3,484.23 related to defendants' witness, Ramamurthy Sivakumar ("Sivakumar") because according to Shum, Sivakumar was traveling to the United States from India on a business trip, not for trial. The record on this issue is not completely clear. contends that this witness was called when he was to accommodate his travel schedule. However, counsel for Shum defendants states that Sivakumar did not have plans to be in the United States and that counsel is "informed and believes that [Sivakumar's] business schedule was rearranged" so that he could travel to California to testify. There is no evidence before the Court that Sivakumar came to the United States for any reason other than to testify at trial. will not disallow his witness fee. Therefore the Court While the Court is sympathetic to the toll this travel may have taken on Sivakumar, it does not believe that plaintiff should have to reimburse Sivakumar for the costs of a first-class ticket, especially when counsel for defendants states that it is Intel's general rule that its employees are to fly coach. Moreover, 28 U.S.C. § 1821(c)(1) states that a witness "shall use a common carrier at the most economical rate reasonably available." Shum argues that this entry should at least be 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 disallowed because it constitutes unnecessary flight charges for a first class ticket. There is, however, no evidence in the record as to the actual cost of a coach versus a first-class ticket, thus the Court will reduce reimbursement for this cost by half. Shum also argues that witness fees totaling $6,501.74 should not be allowed because they constitute charges for Defendants' technical experts on inventorship ­ and Defendants did not prevail on the majority of those claims. Shum contends that the certain costs of travel and lodging for expert witnesses Dr. Thomas L. Koch, Randy Heyler, Jim Timmins and Dr. Yung-Cheng Lee during the 2008 trial are not taxable because they related to technical issues upon which Shum prevailed. Motion, pp. 12:22-13:12. Defendants contend that these witness fees should still be reimbursed because the "anticipated testimony of Dr. Koch, Dr. Lee and Mr. Heyler" caused Shum to abandon all of his claims of sole inventorship, as well as any claim of inventorship status with respect to the "dual enclosure" patent. Dr. Koch, Dr. Lee and Mr. Heyler's testimony may have been part of what caused Shum to abandon his claim of sole inventorship and without Shum having changed his position they might well have been called as witnesses. Moveover, their testimony contributed to defendants' success in maintaining sole inventorship status with respect to the `427 Patent. Taylor Decl., ¶ 14. Finally, Jim Timmins did not testify on inventorship issues. Instead, he gave expert testimony relating 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to Shum's state law claims, as to which the Court entered judgment in favor of all defendants. Taylor Decl., ¶ 15. Accordingly the travel expenses for each of these witnesses were reasonably necessary and properly taxed by the Clerk in defendants' favor. III. Conclusion The Court GRANTS IN PART AND DENIES IN PART plaintiff's Motion Challenging the Clerk's Taxation of Costs reducing the costs taxed against Shum by $177,753.27 as set out in detail below. As the initial amount of costs taxed against Shum was $507,644.82 the new amount owed would be $329.891.55. Category Amount permitted in Clerks Taxation of Costs $154,400 $1,239.40 Amount Now Permitted by Court Order $77,200 $0 Costs from First Trial Costs on Appeal Costs for Demonstratives and Graphics by Company Verdict Media invoice of 9/15/2008 Verdict Media invoice of 12/09/08 Verdict Media invoice of 1/10/09 The Focal Point invoice of 9/30/08 The Focal Point bill of 10/31/08 $3,350 $30,176.96 $0 $10,605 $27,624.50 $20,617.69 $20,873.23 $13,359.50 $9,250 $7,810.50 20 1 2 3 4 5 6 7 8 9 10 FTI Consulting Copying Charges Witness Fees (subpoenaed but uncalled witnesses) Witness Fees: Sivakumar Mr. $40,979.90 $77,322.40 $585.52 $20,490 $61,857.92 $585.52 $3,484.23 $6,501.74 $1,742.12 $6,501.74 Witness Fees: Defendants' technical experts on inventorship TOTALS $387.155.57 $209,402.30 ______________________________________________________________ United States District Court 11 For the Northern District of California 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IT IS SO ORDERED. Date: October 23, 2009 _______________________ D. Lowell Jensen United States District Judge 21

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